The Financial Ratio That Indicates Whether or Not the Organization

question 6

Multiple Choice

The financial ratio that indicates whether or not the organization is capable of paying off its short-term debts without having to sell its inventory is the ________ ratio.

• A)quick
• B)current
• C)days sales outstanding
• D)profit

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Definitions:

Interaction Term

A variable in statistical models that captures the effect of two or more variables simultaneously affecting a response variable.

Significance Level

The probability of inappropriately disapproving the null hypothesis in a study of statistics, generally labelled as alpha.

Linearly Related

Shows a direct correlation between two variables in which the rate of increase or decrease in one variable is consistent with the rate in the other variable.

Indicator Variables

Indicator variables, also known as dummy variables, are used in statistical models to represent categorical data by assigning a binary value (usually 0 or 1) to each category.